Report: Oil production booming, imports falling

A federal report released Wednesday offers the latest indication that U.S. energy production will continue to boom in the coming decades amid surging production from shale while imports plummet and gasoline consumption falls below previous estimates.

The Energy Information Administration, in a summary of its 2013 Annual Energy Outlook, said domestic energy production will grow more quickly than consumption through 2040. And imports will fall from 19 percent of total U.S. energy consumption in 2011 to 9 percent in 2040.

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The report also contains good news for renewables — though not necessarily for biofuels. And motorists shouldn’t expect a return to cheap gasoline: They’ll be paying more than $4 per gallon in 2040 under the EIA’s scenario.

The report, which will be released in full early next year and updates the agency’s 2012 projections, “shows how evolving consumer preferences, improved technology and economic changes are pushing the nation toward more domestic energy production, greater vehicle efficiency, greater use of clean energy and reduced energy imports,” EIA Administrator Adam Sieminski said.

It comes less than a month after the International Energy Agency predicted the U.S. will become the world’s largest oil producer, moving ahead of Saudi Arabia before 2020, and that North America will be a net oil exporter by around 2030.

Under what the EIA deems the most likely scenario, crude oil production “rises sharply” over the next decade, according to Wednesday’s report, which cites “the advent and continuing improvement of advanced crude oil production technologies.” Annual growth will average 234,000 barrels per day with production reaching 7.5 million barrels per day in 2019.

The growth will come largely from onshore oil production, especially from shale and other “tight” formations, says the EIA, the statistical arm of the Energy Department. But it says production will start “declining gradually” after about 2020, falling to 6.1 million barrels a day in 2040 “as producers develop sweet spots first and then move to less productive or less profitable drilling areas.”